Of Seat Belts, Modernity, Subsidies, Paris, Owls and Still More Things for PhD Students to Agonise About

Then Owen Barder who makes possibly the most sane comment ever posted on a Guardian Blog (unfortunately the competition’s not high). He’s responding to a post by Jonathan Glennie on the Paris Declaration and makes a critical point. If you read much of what’s written about the Paris Declaration you’d think the donor agencies referred to were a bunch of independent entities as opposed to what they actually are: bureaucracies beholden to politicians, who are ultimately beholden to voters. Personally, I think some of the objectives of the Paris Declaration are wrong-headed but when it comes to the more sensible ones (such as harmonisation), what we really need to be doing, rather than simply bemoaning poor progress, is to examine the domestic political incentives in donor countries and see how, if at all, they might be changed to facilitate the outcomes we’d like to see. Creating international norms, which is all the PD actually does, is something that will have an impact up to a point (as it seems to have done with tied aid) but the potential here is bounded by domestic politics. And if we’d like to see better ODA (be it via the PD or through other changes), I think we really need to learn a lot more about the domestic politics involved.

If it’s too late in the evening for you to be reading essays on Foreign Policy a similar argument can be found here on YouTube (via Duncan Green).

And on to government intervention in markets… By the end of the 1990s I think the most extreme versions of neo-liberalism (ones which prescribed pro-cyclical policies in recessions, and the retreat of the state even from social services) were basically dead intellectually (if not politically). The active debate about the state’s role development now centered round active economic interventions by governments. Here authors such as Robert Wade and Ha Joon Chang argued against an orthodoxy that claimed that states really couldn’t out perform markets and their only real role in the economic sphere was to set and maintain good rules of the game. Wade and Chang mustered as evidence countries, like those in parts of Asia, which had intervened in markets and which subsequently saw higher growth rates. Their opponents argued that this growth was in spite of rather than because of these interventions. And that failed interventions were far more common than successful ones. I’m more sympathetic to the Wade and Chang side of the argument — although I reckon the real question isn’t ‘can governments intervene in markets to improve economic performance?’ but rather ‘can governments in poorly governed countries intervene in markets to improve economic performance?’ Here I’d say the evidence is less clear.

Anyhow on the same broad subject two excellent posts on government fertilizer subsidies in Malawi. One from Oxfam’s Max Lawson and one from Owen Barder. In Malawi it looks like subsidies have worked (although see comments under Owen’s post too).